Pure Storage (PSTG) PT Raised to $28 at Stifel
Stifel analyst Chris O'Cull raised the price target on Pure Storage (NYSE: PSTG) to $28.00 (from $25.00) while maintaining a Buy rating following earnings.
The analyst commented, "Pure's 2Q’FY22 revenue of $496.8mn (+23.1% y/y) was well above our $475mn estimate, with continued growth in subscription services (+30.8% y/y), and a major uptick in product sales (+30.0% q/q, +19.3% y/y). Adjusted operating margin of 9.4% was well above our estimate. Management noted particular strength from enterprise customers amid signs that on-prem spending continues to improve, despite recent Covid outbreaks that have slowed the return to offices. Still, Pure noted solid bookings across its product portfolio and its expanding services offerings (Evergreen, Pure-as-a-Service, Portworx, etc.). Oct-Q sales guide of $530mn (+29% y/y) was well above our $495mn estimate, and includes a large FlashArray//C order from a hyperscale cloud provider, but excluding that, Pure still sees 20%+ growth. FY22 sales guide of $2.04bn implies growth continuing into FQ4, and we see growth momentum continuing into FY23. We raise estimates and increase our PT to $28, or ~3x EV/sales. Reiterate Buy."